Merck’s Second Bid for Arbitration Denied in Rotavirus Vaccine Antitrust Case

Judge J. Curtis Joyner denied Merck’s renewed bid to force a class of direct purchasers to arbitrate their antitrust claims related to Merck’s alleged vaccine bundling scheme. The Third Circuit had reversed and remanded the court’s initial order denying Merck’s motion to compel arbitration last year and allowed for limited discovery on the issue. After engaging in that discovery, Merck was still unable to show that plaintiffs—private pediatric medical practices—were bound by arbitration agreements entered into by Physician Buying Groups (“PBGs”) that had negotiated prices on plaintiffs’ behalf. The court held that Merck had not met its burden to show that member practices had sufficient control over the PBGs’ negotiations with Merck to establish that the PBGs were acting as agents for the member practices, particularly as neither the PBGs nor Merck had communicated the existence of the arbitration agreements to the member practices. For that reason, as well, the court rejected Merck’s argument that plaintiffs were equitably estopped from avoiding arbitration for having knowingly benefitted from the PBGs’ agreements.

The plaintiffs in the case challenge Merck’s practice of bundling its rotavirus vaccine, RotaTeq, with multiple pediatric vaccines that only Merck manufactured and marketed. Purchasers that did not agree to the entire bundle faced penalty pricing on all the vaccines. The alleged result was that Merck foreclosed competition from GlaxoSmithKline on its rotavirus vaccine, Rotarix, and maintained inflated monopoly prices on RotaTeq.  

The case is In re Rotavirus Vaccine Antitrust Litigation, No. 2:18-cv-1734, in the Eastern District of Pennsylvania.